• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

Activision Q4: WoW Sub Rev Down 10%, CoD:E=1.5M, Sky Toys=20M, $99M Profit

N

Nirolak

Mrgrgr
codactiveusersi9x3v.png
 
H

Hero

Member
The WoW expansion absolutely needs to come out this year. As it is, I don't really see what they're going to do to keep people from leaving between now and Mists since it doesn't seem to be coming within the next six months.
 
K

Krilekk

Banned
Nirolak said:
Deferred revenue.

It's the same reason EA lost $200 million last quarter, but expects ~$450-550 million in profit next quarter.

It's why I stopped reporting quarterly profit in thread titles. :lol

I can do it for laughs though so people come in and learn about deferred revenue.
Click to expand...

I know about that, but AFAIK that doesn't make sense for game sales. Stuff like CoD Elite or WoW subs, sure, you get the money now but you book only 1/4th of it per quarter. But how could it work for actual game sales? It's not like they produce 21.5 million CoDs and expect them to be sold over the next couple of months, they sell them to distributors and then get the money. Or is it because of the size of CoD distributors can't pay it all in advance and only pay Activision once they sold games to retailers?
 
R

Rösti

Unconfirmed Member
Nirolak said:
Correct, Epic as in the buzz word sense.

Treyarch's game is up this year.
Click to expand...
Exactly. Suggestions have been Call of Duty: Future Warfare, Call of Duty: Space Warfare, Call of Duty: Secret Warfare and Call of Duty: Black Ops 2. The three first mentioned properties were filed as trademarks some time ago (2010).
 
N

Nirolak

Mrgrgr
Krilekk said:
I know about that, but AFAIK that doesn't make sense for game sales. Stuff like CoD Elite or WoW subs, sure, you get the money now but you book only 1/4th of it per quarter. But how could it work for actual game sales? It's not like they produce 21.5 million CoDs and expect them to be sold over the next couple of months, they sell them to distributors and then get the money. Or is it because of the size of CoD distributors can't pay it all in advance and only pay Activision once they sold games to retailers?
Click to expand...

Activision gets no money from their games at all until retailers sell the products and send them money back at the end of their quarter (or the quarter after that).

As such, Activision won't begin to receive money from CoD retail sales until at least January 2012, or perhaps not until April 2012, depending on the retailer.
 
S

Struct09

Member
In November 2011, Call of Duty: Modern Warfare 3 became the first video game ever to surpass $775 million in retail sales in its first five days of release
Click to expand...

Activision and their illegal amounts of money
 
D

Dipswitch

Member
Any new MW3 sales stats? If they're not crowing at anything other than the initial sales numbers, it might not be living up to expectations. I'm thinking the sales legs on this version (And likely the following iterations) are not going to be nearly as good as the previous titles.
 
N

Nirolak

Mrgrgr
WoW sub revenue is down 10% due to the Diablo 3 bundle, since they're removing that equally across all the related products.
 
C

CarbonatedFalcon

Member
It's going to be Diablo 3 and MoP for sure.

Sorry Starcraft fans.

That's not to say that HotS won't release this year, but with the way they approached WoW development (content pipeline), there has to be an expansion this year. Numbers will decline further otherwise.
 
H

Hey You

Member
Nirolak said:
I'm guessing that Neversoft's new FPS might be coming out.
Click to expand...

Interesting. Wouldn't make much sense to release two CoD's near each other though. If Neversoft's FPS is CoD, I would let them release it next year and give IW and extra year for possibly Next gen consoles. But heck, I just want Black Ops 2 :p

Anyways, this is the wrong thread for discussion of this. My bad :p
 
N

Nirolak

Mrgrgr
Hey You said:
Interesting. Wouldn't make much sense to release two CoD's near each other though. If Neversoft's FPS is CoD, I would let them release it next year and give IW and extra year for possibly Next gen consoles. But heck, I just want Black Ops 2 :p

Anyways, this is the wrong thread for discussion of this. My bad :p
Click to expand...

Nah, this is a fine thread for it since that's where the announcement was made.

Their FPS is a new IP though according to their job postings.
 
H

Hey You

Member
Nirolak said:
Nah, this is a fine thread for it since that's where the announcement was made.

Their FPS is a new IP though according to their job postings.
Click to expand...

Ah interesting, that's the part I was confused about. I wasn't sure if the article meant 2 new Call of Duty multiplayer titles or 2 multiplayer titles overall from Activision to be released this year.
 
N

Nirolak

Mrgrgr
Hey You said:
Ah interesting, that's the part I was confused about. I wasn't sure if the article meant 2 new Call of Duty multiplayer titles or 2 multiplayer titles overall from Activision to be released this year.
Click to expand...

Actually, I just deciphered that comment:

Activision stabilized subscriber defections from the Blizzard unit’s “World of Warcraft” online multiplayer games, after losing almost 1 million the previous quarter. The number of paying subscribers fell to 10.2 million from 10.3 million in October.

New Online Titles

The online multiplayer unit plans to release two new titles this year, Kotick said. He declined to provide the dates.
Click to expand...

To Bloomberg, Blizzard is the "online multiplayer unit", and they intend to release two games this year. :lol
 
S

szaromir

Banned
Is Starcraft 2-2 going to come out this year? It's weird that they mention Diablo 3 as a 2012 release but not Starcraft. Maybe they don't expect it to sell as strongly.
 
S

Sothpaw

Member
Nirolak said:
Activision gets no money from their games at all until retailers sell the products and send them money back at the end of their quarter (or the quarter after that).

As such, Activision won't begin to receive money from CoD retail sales until at least January 2012, or perhaps not until April 2012, depending on the retailer.
Click to expand...

I don't think you're quite right about this. I haven't looked at the Activision financials, but companies need not defer revenues if cash hasn't been received if the amount they are going to receive is fixed and determinable.

Rather, I think the deferral of revenue is due to Activision spreading revenue recognition of games with online components over time. Take Call of Duty for example, even though Activision may receive cash for the games, they still have an obligation to customers to provide an online component. This is referred to as a "deliverable" and revenue may not be recognized in full until deliverables are...delivered.

Also, don't forget that with the recognition of deferred revenues comes the expense associated with deferred cost of goods. So deferred revenues are not all profit.
 
N

Nirolak

Mrgrgr
Sothpaw said:
I don't think you're quite right about this. I haven't looked at the Activision financials, but companies need not defer revenues if cash hasn't been received if the amount they are going to receive is fixed and determinable.

Rather, I think the deferral of revenue is due to Activision spreading revenue recognition of games with online components over time. Take Call of Duty for example, even though Activision may receive cash for the games, they still have an obligation to customers to provide an online component. This is referred to as a "deliverable" and revenue may not be recognized in full until deliverables are...delivered.

Also, don't forget that with the recognition of deferred revenues comes the expense associated with deferred cost of goods. So deferred revenues are not all profit.
Click to expand...

I'm not really a financial expert so I could be totally wrong here about the reason for the deferred revenue.
 
S

Sothpaw

Member
Nirolak said:
I'm not really a financial expert so I could be totally wrong here about the reason for the deferred revenue.
Click to expand...

OK well I'm no expert but I am a CPA with financial statement audit experience :)

Anyway I did a little digging and yes, the deferral is due to spreading of revenues of games with online components.
 
B

bigtroyjon

Member
Sothpaw said:
Also, don't forget that with the recognition of deferred revenues comes the expense associated with deferred cost of goods. So deferred revenues are not all profit.
Click to expand...

I'm not positive on Activision but other video game companies(EA for one and THQ) I've looked at don't defer the expenses, they only defer revenue.
Here's EA's comment on deferred revenue, last line is where they mention expenses.
Change in Deferred Net Revenue (Packaged Goods and Digital Content). Electronic Arts is not able to objectively determine the fair value of the online service included in certain of its packaged goods and digital content. As a result, the Company recognizes the revenue from the sale of these games and content over the estimated online service period. In other transactions, at the date we sell the software product we have an obligation to provide incremental unspecified digital content in the future without an additional fee. In these cases, we account for the sale of the software product as a multiple element arrangement and recognize the revenue on a straight-line basis over the estimated life of the game. Internally, Electronic Arts' management excludes the impact of the change in deferred net revenue related to packaged goods games and digital content in its non-GAAP financial measures when evaluating the Company's operating performance, when planning, forecasting and analyzing future periods, and when assessing the performance of its management team. The Company believes that excluding the impact of the change in deferred net revenue from its operating results is important to (1) facilitate comparisons to prior periods during which the Company was able to objectively determine the fair value of the online service and not delay the recognition of significant amounts of net revenue related to online-enabled packaged goods and (2) understanding our operations because all related costs are expensed as incurred instead of deferred and recognized ratably.
Click to expand...
 
M

Mrbob

Member
Fuuuuuuuuuuuu, I have this sinking feeling Heart of the Swarm is going to be a 2013 title.

At least Diablo 3 will be out in a couple months!
 
You must log in or register to reply here.

Similar threads

Nvidia reports record earnings, profits on growth in AI and gaming
Business Analysis Hardware 2
68
5K
FStubbs replied
A new Studio AAA by ACTIVISION announced ELSEWHERE
2
96
4K
Phase replied
73% of EA’s revenue last quarter came from live service games.
Sales-Age
24
2K
acm2000 replied
Diablo 4 reached 10 million players in June, driving a record quarter for Blizzard
Sales-Age
36
2K
bender replied
Konami raises forecasts as profits rise 53% to $427m
Business
39
3K
ReBurn replied
Top Bottom